Embodiments disclosed herein generally relate to payment systems. In particular, some embodiments relate to methods, apparatus, systems, means and computer program products for an automatic-loading transaction payment system for consumers based on a virtual wallet account that includes automatic-loading features.
Payment card systems are in widespread use, and a prominent payment card system is operated by the assignee hereof, MasterCard International Incorporated, and by its member financial institutions. Payment Service Providers (PSPs) enable consumers or customers to pay merchants (and other consumers) for goods and services by using “decoupled debit” schemes. Such schemes feature payments that are initiated via proprietary PSP accounts, but the actual funding for the payment is debited from a consumer's stored value account or credit line which is typically held by a third-party institution. The decoupled debit schemes are typically organized as “prepaid” or “postpaid” systems.
FIG. 1 is a block diagram of a transaction handling system 100 for purposes of illustrating a consumer transaction process. FIG. 1 includes a merchant device 104 (which may be a point-of-sale (POS) terminal), a PSP 106, an issuer financial institution (FI) 108 which issued the customer's payment card account 110, a payment system 112 (which may be the well-known Banknet™ system operated by the assignee hereof) for routing transactions from acquirers to issuers, and an acquirer financial institution (FI) 114 which issued the merchant's account 116. Blocks 108 and 114 should also be understood to represent, respectively, computer systems operated by or on behalf of the customer issuer FI and the acquirer FI.
A consumer or customer (not shown) initiates a transaction by visiting a retail store (not shown) operated by the merchant, selects goods (not shown) that she wishes to purchase, and carries the goods to the merchant's POS terminal 104. The consumer presents a mobile device 102, such as a mobile telephone, that includes an integrated circuit (IC) or chipset of the kind embedded in contactless payment cards that allows the mobile device to be used as a contactless payment device. In particular, the mobile device 102 may store information associated with a consumer payment card account that can be utilized for consumer transactions. In some embodiments, the consumer taps the mobile device 102 on a proximity reader (not shown) associated with the merchant's POS terminal to initialize communications. In particular, the mobile device 102 transmits consumer information such as the payment card account number to the POS terminal 104. The POS terminal 104 then transmits 120 an authorization request to the PSP 106 which includes the payment card account number and the amount of the transaction, among other information. The arrows 118, 120, 122, 124 and 126 trace the path of the payment transaction as routed from the merchant device 104 through the PSP 106, to the customer issuer FI 108, and via the payment system 112 to the acquirer FI 114 that issued the merchant account 116. Assuming that all is in order, the acquirer FI 114 transmits a favorable authorization response to the POS terminal 104. The arrows 128, 130, 132 and 134 trace the path of acknowledgement messages from the acquirer 114 via the payment system 112 and the customer issuer FI 108 through the PSP computer 106 to the merchant device 104. Arrow 136 from the merchant issuer FI 114 represents a confirmation message sent directly from the merchant issuer 114 to the POS terminal 104 that confirms that the payment for the pending sale has been or will be credited to the merchant account 116. When the confirmation message is received at the POS terminal 104 it can be displayed for reading by the customer and a cashier, and the merchant then allows the sale to be completed so that the customer can leave the store with the goods.
A subsequent clearing transaction initiated by the merchant results in a transfer of the transaction amount from the customer's payment card account 110 to the merchant's account 116. The customer's payment card account 110 may be, for example, either a debit card account or a credit card account. If the customer used a debit card then the clearing transaction results in the funds being debited directly from the cardholder account 110 and transferred to the merchant account 116. If the customer used a credit card, then the clearing transaction results in a charge being posted against the cardholder account 110, which charge subsequently appears on the customer's monthly credit card statement.
Referring again to FIG. 1, in a prepaid system, funds debited from an underlying funding account may be credited to the consumer's stored value account on the PSP 106 in advance of any actual payment transactions. Examples of such systems are payments funded by a PayPal™ or iTunes™ stored value account, wherein the consumer funded the PayPal™ or iTunes™ account by debiting her Demand Deposit Account (DDA or bank account) or her debit or credit card account. Thus, in such prepaid systems, the transaction funding the PSP stored value account is a separate and distinct transaction from any purchase transaction, and it precedes use of the funds by the consumer.
In a postpaid system (in contrast to a prepaid system) funds are debited from an underlying funding account and credited to the stored value account on the PSP 106 after the actual payment transaction occurs. For example, a PayPal™ account may be linked to a consumer's bank account, debit card account, or credit card account so that the linked account can be used as the consumer funding account. Thus, in a postpaid system, the purchase transaction utilizing the consumer's funds precedes the PSP 106 obtaining the funds from the consumer funding account.
For both the prepaid and the postpaid systems, customer account credentials for an underlying funding account are typically stored on the PSP system. Consumers also understand that storing consumer payment credentials on a PSP system, or on multiple PSP systems, in order to facilitate prepaid and postpaid decoupled debit transactions creates personal payment risk to the consumer. The increased risk of having personal credit data compromised is well understood by consumers and leads to the perception of increased risk of identity theft. It has been found that this perception of increased identity theft risk is one of the major barriers to consumer adoption of such decoupled payment schemes.
In addition, in both the prepaid and the postpaid systems (decoupled debit schemes) described above the “funding transaction” and the “payment transaction” are treated as two separate and distinct transactions which can create a number of business problems for consumers, merchants, the PSP, and for the holder of the funding account. For example, requiring a consumer to prepay for a stored value on a PSP system forces the consumer to disburse funds over multiple accounts. The funds in a PSP stored value account cannot be used elsewhere, thus limiting the consumer's utility of those funds. In addition, having funds disbursed over multiple accounts requires the consumer to keep track of various account balances and activity, which decreases consumer convenience value. Further, in a prepaid decoupled debit system, consumer transactions may be declined due to insufficient funds in the stored value account even though adequate funds exist in the consumer's decoupled funding account. When a transaction is declined, the consumer is forced to load funds into the decoupled stored value account and reinitiate the payment transaction or use another method of payment, thus decreasing the utility and convenience value to the consumer.
Another problem with treating the funding and use transactions as two separate and distinct transactions (in both types of decoupled debit systems) is that the transaction details concerning the actual use of funds are hidden from the issuer FI of the underlying funding account. The inability of the funding account issuer FI to see transaction details associated with the use of the consumer's funds (such as the merchant ID, point of service mode, cardholder verification method, and the like) devalues the transaction to the funding account issuer FI. For example, the lack of transaction details prohibits the funding account issuer FI from offering loyalty points or other rewards to the consumer, prevents the funding account issuer FI from gaining value via data analytics, and circumvents fraud and risk management tools that depend on such transaction details.
In addition, the separate use and funding transactions of a postpaid decoupled debit system creates payment risk. In particular, the funding transaction is accomplished after the consumer's payment transaction is completed and thus the consumer already has possession of the goods or services before the payer has been paid. Accordingly, payment risk is created because the balance of the funding account may be insufficient to cover the amount already paid in the use transaction, and the settlement of those funds may require a multiple day lag time. Typically, the inherent payment risk associated with a postpaid decoupled debit system requires either delaying the merchant payment until funds are settled, or making the PSP bear the full risk.
Separate use and funding transactions associated with decoupled debit schemes also create complexity and potential consumer dissatisfaction concerning charge reversals and credits. In particular, if a prepaid decoupled debit system is utilized, reversals and credits can only be accomplished to the PSP account and not to the underlying funding account. If a postpaid decoupled debit system is utilized, then the lag time between settlement of the use transaction and settlement of the funding transaction can create sequencing problems. In particular, sequencing problems can occur when reversals or credits are settled before the original funding transaction is even settled and posted, or when debits and reversals or credits span multiple statement periods. In addition, the potential exists for the original funding transaction to be declined even though a reversal or credit transaction has already been settled and posted to the consumer account. Each of these cases can cause consumer dissatisfaction and/or heighten the payment risk to the PSP.
The present inventors recognized that a virtual wallet system with automatic-loading capabilities could be utilized to substantially improve the operation of decoupled debit payment account schemes. Use of a virtual wallet account assigned to a consumer by virtue of a virtual wallet account number (which can be described as a pseudo-primary account number (pseudo-PAN)) allows the consumer to fund payments for multiple PSP accounts from a single funding account while simultaneously protecting personal data and protecting against identity theft. Additional benefits and advantages concerning the use of a virtual wallet service that includes automatic-loading (or auto-load) capabilities, in various embodiments, accrue to end-users, PSPs, and funding account issuers for the operation of decoupled debit payment schemes, which will be apparent by reading the detailed specification below.